WIRELESS INSTANT MESSAGING
- Beyond or behind SMS?
by Nicki Hayes, May 18, 2001
In the internet world, instant messaging (IM) has been the fastest growing communication channel over
the last few years. In the wireless world SMS has seen similar success, particularly in Europe. It’s not
surprising then that in this, the age of convergence, there’s talk of bringing IM to the wireless world.
But, does wireless IM add any value to SMS to anyone other than the network operators?
In a recent in-depth study on instant messaging (IM) and short message service (SMS), leading independent
consulting and market research firm The Radicati Group, Inc, estimates that active IM accounts will grow
from 141 million in 2000 to 1.38 billion in 2004. Similarly, they predict that the market for SMS will enjoy
strong growth over this period, increasing from 162 million users to 758 million users worldwide.
There’s no surprise then that, even as you’re reading this, the major IM providers are talking to the key
mobile operators about how to achieve universal access to IM. They’re not the only ones looking for a slice
of the cake. Just last week BulletIN.net demonstrated its wireless interface to AOL’s IM using its patented
middleware technology. Many other players are also building IM capability into their products and services
too, including Openwave, Nokia, Valis, Followap and Smallplanet.
The analysts also seem convinced. Durlacher, Eqvitec and Ovum are just three respected sources who have
reported on the subject. Indeed, Durlacher and Eqvitec estimate that the revenue from wireless IM in
Europe will grow from 1 million euros to 760 million euros between 2001 and 2005.
So, it seems like a done deal. The market’s hyping it. There is a belief that it offers a true value proposition.
IM will move towards the wireless space. But to whom does wireless IM deliver value? It’s clear wireless
IM will be a major revenue generator for the IM providers and network operators - indeed it could just be
the cash cow operators need to pay the ludicrous sums they’ve had to shell out for the 3G licenses,
particularly in Europe. But how does IM add value to SMS for the end user?
There is, of course, the value that will be added by the 3G network - the ability to send and receive
pictures, sound and even video-clips for instance. But these values are delivered by 3G not IM. Ultimately
any added value from IM has to come from the fact that the user knows that the person they are
communicating with is present. While its difficult to see how this adds value to current SMS users, it’s easy
to see that the development of complimentary services dependent on this knowledge will add value.
Take the example of the current SMS user. If a SMS user knows the person they’re “texting” is present and
needs an instant two-way conversation, surely they’d use a voice call, old fashioned though it seems?
Anyone who uses SMS regularly will be aware that “voice” is far more instant than keying in messages via
a handheld device. That’s why the service is used for short messages and not long messages after all!
No, where IM adds value is in facilitating the development of a range of new services, based on the fact
that users know that the person they’re communicating with is present. Wireless IM will drive the
development of many new location-based, m-commerce and advertising services. It is up to the providers
of these services to ensure that they add value to the consumer.
Wherever the value proposition comes from, one thing’s for sure, before IM comes to the wireless world its
providers need to ensure that we don’t have a repeat of their strong-arm tactics in the wired world. Instant
messaging will not become a truly mass medium until it clears one hurdle - compatibility. In the wired
world IM providers have ensured that users of their services can not communicate with users of their
competitors’ services. It’s up to both the established IM providers and the network operators to ensure that
this hurdle is overcome in the wireless world.
The battle is certainly on between these two entities to win wireless IM customers. Who will win in the
long run is an open question. IM providers have an existing user base and brand value on their side.
Operators have access to the networks, the loyalty of customers, complimentary services and an existing
billing method on theirs. Standardization of IM protocols and the development of wireless technologies will
also have a large part to play.
As always, at the end of the day it is likely to be the players with “speed to market” advantages that will
gain the lion’s share. Mind you, if the estimated user-base is correct, even an insect’s share would be
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About the author:
Nicki Hayes is a freelance writer and corporate communications consultant specialising in business to business internet issues. She has contributed editorial to a number of publications including Unstrung.com, Guardian Online, Financial Times, Banking & Financial Training, eAI Journal and Secure Computing. Nicki is also the European correspondent for The Wireless Developer Network. Nicki is based in Dublin, Ireland and also has a base in Cambridge, UK. Through her consultancy, Hayes-Singh Associates, she has access to a number of technical writers and PR consultants throughout Ireland and the UK.